Abbas added in the speech that it was "racist" to refer to Palestinian prisoners as terrorists

Palestinian President Mahmoud Abbas has defended payments made to Palestinian prisoners in Israeli jails as an important function of his government.

"The political prisoners are in effect the victims of the occupation, not the creators of the occupation," Abbas wrote in a speech that was delivered on his behalf by an adviser at the Herzilya conference on Thursday.

"Payments to support families are a social responsibility to look after innocent people effected by the incarceration or killing of their love ones," he said.

Earlier in June United States Secretary of State Rex Tillerson surprised both the Palestinian Authority and Israel by saying that President Abbas had agreed to halt the payments to prisoners' families. While Israel strongly condemns the practice as encouraging terrorism, it is a politically sensitive issue for Abbas, who is already under pressure over a lack of process on the diplomatic front.

Abbas added in the speech that it was "racist" to refer to Palestinian prisoners as terrorists.

"One out of every three Palestinians has spent time in an Israeli prison. Is any rational human being going to claim that these one million people are terrorists? That one third of Palestinians are terrorists because they have been through Israeli jails?" he asked.

"It is really, quite frankly, racist rhetoric to call all our political prisoners terrorists. The political prisoners are in effect the victims of the occupation, not the creators of the occupation.

Elsewhere in his speech the ageing President called for the reinstatement of joint committee on incitement and repeated an earlier assertion that the Holocaust was "the greatest crime in history".